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VAT: Abu Dhabi cracks down on overcharging businesses

Action follows complaints from customers about price manipulation

Gulf News

Abu Dhabi: Abu Dhabi’s Department of Economic Development (DED) is cracking down on businesses that are overcharging customers in the name of VAT (Value Added Tax), a senior Abui Dhabi official from the department said  on Tuesday.

“We issued some fines in the first week either for collecting tax when businesses are not registered or for increasing the prices without any justification,” said Khalifa Salem Al Mansoori, DED undersecretary, on the sidelines of UAE economic outlook forum.

He did not specify how many fines they had issued since the start of VAT on January 1, but said they are continuing inspections to see if there are any violations.

“We are continuing inspections. If there are cases, we validate, verify and check the businesses.”

The department is also receiving a number of enquiries pertaining to the tax, including some complaints from customers on price manipulation. “We’ve received 300 enquiries in the first week. Official complaints are small in number but there are enquiries about tax and how to deal with it.”

The department also said last week a small change of 10 fils and 5 fils can be rounded off to 25 fils and traders should not charge customers more than 20 fils in addition to the bill amount.

The statement came after complaints from consumers that they are not being given exact change after the purchase of items post introduction of 5 per cent value added tax on items.

Earlier this weeek, the UAE Central Bank said that there is enough availability of small denominations of the UAE dirham at the moment.

“The role of the Central Bank of the UAE is to monitor cash usage in the market and supply banks with the quantities of coins they require to address the needs of their various customers,” the bank said in a statement.

The UAE ministy of economy also urged consumers to report to them by calling on the phone number 600522225 for any complaints on prices.

VAT is levied on most items including food and beverages, electronic goods, jewellery, among others. UAE and Saudi Arabia are among the first countries in the GCC (Gulf Cooperation Council) region to implement VAT.

Khalid Al Bustani, director general of UAE Federal Tax Authroity said on Tuesday that they worked for many months to implement the tax and they have given enogh time for all businesses to register. He was repsonding to a question from a businessan that little time was given for companies to register.